Fred Schulte, KFF Health News
In the biggest Medicare Advantage fraud settlement thus far, Kaiser Permanente has agreed to pay $556 million to settle Justice Department allegations that it billed the federal government for medical situations sufferers didn’t have.
The settlement, announced Jan. 14, resolves whistleblower lawsuits that accused the enormous well being insurer of mounting a years-long scheme by which it overstated how sick sufferers have been to illegally enhance revenues.
“Medicare Advantage is a vital program that must serve patients’ needs, not corporate profits,” stated U.S. Attorney Craig Missakian for the Northern District of California, in asserting the settlement.
“Fraud on Medicare costs the public billions annually, so when a health plan knowingly submits false information to obtain higher payments, everyone — from beneficiaries to taxpayers — loses,” he stated.
Medicare Advantage plans provide seniors a non-public various to unique Medicare. The insurance policy have grown dramatically lately and now enroll about 34 million members, greater than half of the folks eligible for Medicare. About 2 million Medicare members are enrolled in KP plans.
Attorney Max Voldman, who represents whistleblower James Taylor, stated the case reveals the necessity for a “continued effort to fight fraud in health care.”
“It’s important to send a signal to the industry, and this number hopefully does that,” he stated.
Taylor, a longtime Kaiser Permanente doctor, filed his go well with towards the corporate in October 2014.
“It was a long, hard-fought case,” Voldman stated.
The Justice Department took over his case, bundled with others, in July 2021. In courtroom filings, the federal government argued the health plan “pressured” doctors in Colorado and California so as to add diagnoses “regardless of whether these conditions were actually considered or addressed by the physician during the patient visits,” insurance policies that violated Medicare necessities.
From 2009 by way of 2018, KP added roughly half 1,000,000 diagnoses that generated about $1 billion in improper funds to the well being plan, based on the criticism.
The authorities pays Medicare Advantage plans greater charges to cowl sicker sufferers. But over the previous decade, dozens of whistleblower lawsuits, government audits, and different investigations have alleged that well being plans exaggerate how sick sufferers are to pocket funds they don’t deserve, a tactic recognized within the trade as “upcoding.”
The Justice Department alleged that Kaiser Permanente officers knew its practices have been “widespread and unlawful” however that the corporate “ignored numerous red flags and internal warnings that it was violating” Medicare guidelines. In settling the case, KP didn’t admit any wrongdoing.
In a statement posted on its web site, the corporate stated it settled the case “to avoid the delay, uncertainty, and cost of prolonged litigation.”
The firm famous that different well being plans had “faced similar government scrutiny” over Medicare Advantage billing practices. It stated the whistleblower instances “involved a dispute about how to interpret” Medicare’s billing necessities.
The civil fits have been filed underneath the False Claims Act, a federal regulation that allows non-public residents to sue on behalf of the federal government and share any cash collected consequently.
In all, six whistleblowers filed instances towards Kaiser Permanente. In June 2021, the District Court for the Northern District of California consolidated the instances into two, one introduced by Taylor and the opposite by Ronda Osinek, additionally a former KP worker.
Osinek, who educated physicians on medical coding tips, filed her case in August 2013. In her go well with, she alleged that Kaiser Permanente inflated claims submitted to Medicare by having medical doctors amend medical recordsdata, typically months after a affected person’s go to, to slap on diagnoses that weren’t handled on the time or didn’t exist.
Under the settlement, the whistleblowers, generally known as “relators,” are set to obtain a mixed $95 million, based on the Justice Department.
The KP settlement comes on the heels of a Senate report this month that accused UnitedHealth Group of “gaming” the Medicare Advantage fee system, which known as “risk adjustment.”
“My investigation has shown UnitedHealth Group appears to be gaming the system and abusing the risk adjustment process to turn a steep profit,” Sen. Chuck Grassley (R-Iowa) stated in a press release accompanying the report’s launch.
Grassley, who chairs the Senate Judiciary Committee, stated his findings have been primarily based on a overview of greater than 50,000 pages of inside firm paperwork. UnitedHealth Group disputed the findings and has lengthy denied that its coding observe triggers improper funds.
The report cited a number of medical situations which have repeatedly been linked to overbilling by Medicare Advantage plans, reminiscent of coding for opioid dependence dysfunction in sufferers who’re taking their drugs as directed for ache.
The Senate report additionally alleged that Medicare Advantage plans have improperly recognized dementia.
The report stated that Medicare eliminated dementia from its checklist of codes in 2014 partly resulting from issues over upcoding. After the Centers for Medicare & Medicaid Services reintroduced the code in 2020, researchers discovered that “annual incident dementia diagnosis rates in MA increased by 11.5%” relative to conventional Medicare, the report stated.
“Medicare Advantage is an important option for America’s seniors, but as the program adds more patients and spends billions in taxpayer dollars, Congress has a responsibility to conduct aggressive oversight,” Grassley stated. “Bloated federal spending to UnitedHealth Group is not only hurting the Medicare Advantage program, it’s harming the American taxpayer.”
